More hours, more jobs? The employment effects of longer working hours

Martyn Andrews, Hans-Dieter Gerner, Thorsten Schank and Richard Upward

Oxford Economic Papers, 2015, vol. 67, issue 2, 245-268

Abstract: Increases in standard hours of work have been a contentious policy issue in Germany. Whilst this might directly lead to a substitution of workers by hours, there may also be a positive employment effect due to reduced costs. Moreover, the response of firms may differ between firms that offer overtime and those that do not. For a panel of German plants (2001–2006) drawn from the IAB Establishment Panel, we are the first to analyse the effect of increased standard hours on employment. Using difference-in-difference methods we find that, consistent with theory, overtime plants showed a significant positive employment response, whilst for standard-time plants there is no difference between plants that increased standard hours and those that did not. There is clear evidence of wage concession in all treated plants.

Date: 2015
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Working Paper: More Hours, More Jobs? The Employment Effects of Longer Working Hours (2012)
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